GST cuts, record gold prices and a steel-price rebound are pulling autos, banks, metals and retail back into growth. But IDBI Capital and Anand Rathi both flag the same catch — a Gulf conflict whose hit to input costs, freight and currency lands mostly next quarter.
Growth, it seems, is coming back.
IDBI Capital framed the financial sector plainly, titling its banking section “Steady credit growth; key focus on MSME stress & NIM.” Anand Rathi went broader, headlining its preview “Growth Revival on the Cards Amid Continued Uncertainty.” Read together, the two views rhyme far more than they clash — and that consensus is worth paying attention to.
Banks: Credit Is Accelerating
Both houses see system credit growth firming up. IDBI Capital pegged it at roughly 12–13% YoY, with an elevated credit-deposit ratio of nearly 83% keeping funding costs sticky and NIMs range-bound as repo-cut transmission slowly filters through lending yields. Anand Rathi sees growth improving to about 13.9% YoY, up from 12.4% in the December quarter, and expects public sector banks to outpace private peers on growth, margins and asset quality. Axis Bank, Federal Bank and City Union Bank surface as preferred names across the two reports.
Autos and Consumer: The GST Cut Is Working
Anand Rathi expects a punchy ~23% YoY revenue jump for its auto coverage, led by TVS Motor, Bajaj Auto and Maruti — fuelled by GST cuts, replacement demand, premiumisation and a pickup in infra and mining capex. As Anand Rathi put it, growth was aided by “production numbers, premiumisation, price hikes and early buying before further price hikes.” EBITDA margin stays broadly flat as higher input costs offset lower discounts. Consumer retail is similarly upbeat at ~18% aggregate revenue growth, with value retail and jewellery riding a roughly 79% YoY surge in gold prices.
Metals: Steel Prices Snap Back
Both brokerages flag the same tailwind — domestic HRC prices rebounding around 30% off their December lows toward ₹59,500 a tonne, driving sequential EBITDA-per-tonne expansion despite costlier coking coal. IDBI Capital stays cautious on valuation, noting that “elevated valuations limit the upside potential,” and maintains a Neutral stance on the sector. Anand Rathi is more constructive, with Tata Steel, Lloyds Metals and IMFA among its top picks.
IT: Soft Top Line, Steady Margins
IT is the cautious corner — muted near-term growth, with margins held up by rupee depreciation and cost control. The structural story both houses lean on is AI: a $300–400 billion services market by 2030 that Anand Rathi argues consensus has not yet priced in, positioning scaled Indian IT players as the execution and governance layer for enterprise AI.
The Common Thread: The War in the Price
Chemicals, aviation, hotels, infrastructure and FMCG all carry the same asterisk — the West Asia conflict. Anand Rathi captured it crisply for chemicals under the heading “Navigating the Fault Lines” — a steady January-February, a disrupted March, and a fuller cost flow-through expected only in Q1FY27. IDBI Capital echoed the logistical drag across capital goods and specialty chemicals, repeatedly noting the Middle East crisis as a swing factor.
Demand is genuinely reviving across autos, banks, building materials and retail. But the war-driven cost wave is largely a next-quarter problem. Q4FY26, for now, is the calm before that test — strong on demand, with the real margin reckoning still ahead.